Federated Reports 1Q Earnings Consistent With Prior Guidance.Business Editors CINCINNATI--(BUSINESS WIRE)--May 14, 2003 Federated Connected and treated as one. See federated database and federated directories. Department Stores This is a list of department stores. In the case of department store groups the location of the flagship store is given. This list does not include large specialist stores, which sometimes resemble department stores. , Inc. (NYSE NYSE See: New York Stock Exchange :FD)(PCX (1) A bitmapped graphics file format that handles monochrome, 2-bit, 4-bit, 8-bit and 24-bit color and uses RLE to achieve compression ratios of approximately 1.1:1 to 1.5:1. Images with large blocks of solid colors compress best under the RLE method. See PC Paintbrush. :FD) today reported diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of 24 cents for the fiscal first quarter of 2003, exceeding the company's guidance of 14-19 cents a share for the quarter primarily as a result of lower-than-anticipated store closing and consolidation costs. Diluted earnings per share for the first quarter of the previous fiscal year were 43 cents a share. Federated's results for the first 13 weeks of 2003 included $8 million in store closing and consolidation costs principally related to the closing of duplicative du·pli·cate adj. 1. Identically copied from an original. 2. Existing or growing in two corresponding parts; double. 3. stores in the Atlanta Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. market, where Rich's
Rich's was a major department store retail chain, headquartered in Atlanta, Georgia, that operated in the southern U.S. and Macy's Macy's formerly R.H. Macy & Co., Inc. Major U.S. department-store chain. Its former flagship, an 11-story store that occupies a city block in New York City's Herald Square, was for many years the largest single store in the country. Rowland H. stores have been combined. The company originally had estimated these one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. costs at $35 million in the first quarter, but now anticipates that some of these costs will be incurred later in the year while as much as $10-15 million will be permanently eliminated. Terry J. Lundgren Terry J. Lundgren (b. 1952) is the CEO, Chairman of the Board, President, and Director at Macy's, Inc., the parent company of Macy*s and Bloomingdale's department stores. Lundgren is also the namesake of the Terry J. , Federated's president and chief executive officer, noted that earnings per share in the quarter still would have met prior guidance had Federated's store closing and consolidation costs reached their originally anticipated level. He said Federated is satisfied with its first quarter earnings performance. "Our ability to produce planned earnings in a sales environment that continues to be weak is reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of a number of factors, foremost among them being good inventory management and tight expense controls for which Federated is well known," Lundgren Lundgren is a Swedish surname and may refer to:
Conditions under which a firm proposes to sell its goods or services for cash or credit. , but we are hopeful that the economy will continue to improve, eventually stimulating consumers to begin to resume more normal spending patterns in the latter half of the year." Operating Income/Cash Flow Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. in the first quarter ended May 3, 2003, was $146 million or 4.4 percent of sales. This compares to operating income of $221 million or 6.4 percent of sales for the first quarter of 2002. Cash flow from continuing operating activities was $204 million in the first quarter, compared to $169 million in the same period last year. After first-quarter continuing investing activities of $52 million this year and $92 million last year, cash flow from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the before financing activities was $152 million compared to $77 million in the same period last year. The company used approximately $120 million to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. 4.3 million shares of Federated common stock in the first quarter. Sales Sales for the first quarter of 2003 totaled $3.291 billion, a decrease of 4.7 percent from sales of $3.453 billion in the same period last year. On a same-store basis, Federated's year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. sales were down 5.0 percent. Federated opened one new store in the quarter, the Bloomingdale's This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. Medinah home store in Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. . There were no store closures in the period. Looking Ahead Federated's earnings expectations for fiscal 2003 now are forecasted to be $3.10-$3.25 a share - 50-55 cents a share in the second quarter and $2.40 to $2.50 a share in the second half - above the most recent forecast of $3.05-3.25 a share for the year. These earnings expectations include estimated one-time costs related to store closings of $30-35 million for the year - $10-15 million now planned in the second quarter and $12-17 million now planned in the second half of the year. Originally, the company had planned $5 million of store closing costs Closing Costs The numerous expenses (over and above the price of the property) that buyers and sellers normally incur to complete a real estate transaction. Costs incurred include loan origination fee, discount points, appraisal fee, title search, title insurance, survey, taxes, in both the second quarter and fall season (combined third and fourth quarters). Federated still anticipates same-store sales Same-store sales is a business term which refers to the revenue generated by one of a retail chain's specific outlets during a certain period of time (often a fiscal quarter or a particular shopping season), compared to an identical period in the past, usually in the previous year. for the year to be flat to down 1.5 percent - down 2-3 percent in the second quarter and for the fall season ranging from up 1 percent to down 1 percent. In April, Federated's board of directors initiated payment of quarterly dividends, and a dividend of 12.5 cents a share on Federated's common stock will be payable July July: see month. 1, 2003 to shareholders of record at the close of business on June June: see month. 16, 2003. Federated, with corporate offices in Cincinnati Cincinnati (sĭnsənăt`ē, –năt`ə), city (1990 pop. 364,040), seat of Hamilton co., extreme SW Ohio, on the Ohio River opposite Newport and Covington, Ky.; inc. as a city 1819. and New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , is one of the nation's leading department store retailers, with annual sales of more than $15.4 billion. Federated currently operates more than 450 stores in 34 states, Guam and Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. , under the names of Macy's, Bloomingdale's, The Bon Marche Marche, region, Italy Marche (mär`kā) or the Marches, region (1991 pop. 1,429,205), 3,742 sq mi (9,692 sq km), E central Italy, extending from the eastern slopes of the Apennines to the Adriatic Sea. , Burdines, Goldsmith's, Lazarus and Rich's-Macy's. The company also operates macys.com and Bloomingdale's By Mail. This release contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that reflect current views of the financial performance and other events of Federated. The words "may," "will," "could," "expect," "plan," "anticipate," "believe" and other similar expressions identify forward-looking statements. Any such forward-looking statements are subject to risks and uncertainties. Future results or outcomes could differ materially from current expectations because of a variety of factors that affect the company, including competitive pressures from specialty stores Noun 1. specialty store - a store that sells only one kind of merchandise shop, store - a mercantile establishment for the retail sale of goods or services; "he bought it at a shop on Cape Cod" , general merchandise stores, manufacturers' outlets, off-price and discount stores, new and established forms of home shopping Home Shopping commonly refers to the electronic retailing / home shopping channels industry, which includes such billion dollar companies as HSN, QVC, eBay, ShopNBC, Buy.com, and Amazon.com. (including the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , mail-order catalogs and television) and general consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. levels, including the impact of the availability and level of consumer debt, the effect of weather, the possible effects of the recent SARS epidemic epidemic, outbreak of disease that affects a much greater number of people than is usual for the locality or that spreads to regions where it is ordinarily not present. on the procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. of merchandise from non-U.S. sources and other factors identified in documents filed by the company with the SEC. NOTE: Additional information on Federated is available at www.fds.com. A live webcast of the first quarter earnings call with analysts can be accessed through the Federated website, beginning at 10:30 a.m. ET. Pre-registration is requested. The webcast will be archived for replay beginning approximately two hours after the conclusion of the live call.
FEDERATED DEPARTMENT STORES, INC.
Consolidated Statements of Income (Unaudited) (Note 1)
(All amounts in millions except percentages and per share figures)
13 Weeks Ended
-----------------------
May 3, 2003 May 4, 2002
----------- -----------
Net Sales $3,291 $3,453
----------- -----------
Cost of sales (Note 2) 2,002 2,078
Percent to sales 60.8% 60.2%
----------- -----------
Gross Margin 1,289 1,375
Percent to sales 39.2% 39.8%
Selling, general and administrative expenses
(Note 3) 1,143 1,154
Percent to sales 34.8% 33.4%
----------- -----------
Operating Income 146 221
Percent to sales 4.4% 6.4%
Interest expense - net (70) (74)
----------- -----------
Income from Continuing Operations
Before Income Taxes 76 147
Federal, state and local income tax expense (30) (58)
----------- -----------
Income from Continuing Operations 46 89
Discontinued Operations - -
----------- -----------
Net Income $46 $89
=========== ===========
Basic Earnings per Share $.24 $.44
=========== ===========
Diluted Earnings per Share $.24 $.43
=========== ===========
Average common shares:
Basic 189.2 201.6
Diluted 189.5 204.0
Depreciation and amortization expense $180 $165
FEDERATED DEPARTMENT STORES, INC.
Consolidated Statements of Income (Unaudited) (Note 1)
Notes:
(1) Because of the seasonal nature of the retail business, the
results of operations for the 13 weeks ended May 3, 2003 and May 4,
2002 (which do not include the Christmas season) are not necessarily
indicative of such results for the fiscal year.
(2) Merchandise inventories are primarily valued at the lower of
cost or market using the last-in, first-out (LIFO) retail inventory
method. Application of this method did not impact cost of sales for
the 13 weeks ended May 3, 2003 or May 4, 2002.
(3) Includes costs and expenses related to the Rich's-Macy's
consolidation and other announced store closings of $8 million, or
$.03 per diluted share for the 13 weeks ended May 3, 2003.
FEDERATED DEPARTMENT STORES, INC.
Consolidated Balance Sheets (Unaudited)
(millions)
May 3, February 1, May 4,
2003 2003 2002
---------- ----------- --------
ASSETS:
Current Assets:
Cash $744 $716 $1,009
Accounts receivable 2,876 2,945 2,156
Merchandise inventories 3,502 3,359 3,640
Supplies and prepaid expenses 128 124 139
Deferred income tax assets 11 10 19
Assets of discontinued operations - - 1,389
---------- ----------- --------
Total Current Assets 7,261 7,154 8,352
Property and Equipment - net 6,249 6,379 6,416
Goodwill 262 262 305
Other Intangible Assets - net 378 378 378
Other Assets 266 268 613
---------- ----------- --------
Total Assets $14,416 $14,441 $16,064
========== =========== ========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Short-term debt $939 $946 $1,006
Accounts payable and accrued
liabilities 2,657 2,584 2,712
Income taxes 92 71 9
Liabilities of discontinued
operations - - 894
---------- ----------- --------
Total current liabilities 3,688 3,601 4,621
Long-Term Debt 3,406 3,408 3,859
Deferred Income Taxes 1,005 998 1,349
Other Liabilities 649 672 567
Shareholders' Equity 5,668 5,762 5,668
---------- ----------- --------
Total Liabilities and
Shareholders' Equity $14,416 $14,441 $16,064
========== =========== ========
FEDERATED DEPARTMENT STORES, INC.
Consolidated Statements of Cash Flows (Unaudited)
(millions)
13 Weeks Ended
-----------------------
May 3, 2003 May 4, 2002
----------- -----------
Cash flows from continuing operating
activities:
Net income $46 $89
Adjustments to reconcile net income to net
cash provided by continuing operating
activities:
Income from discontinued operations - -
Depreciation and amortization 179 164
Amortization of financing costs - 2
Amortization of unearned restricted stock 1 1
Changes in assets and liabilities:
Decrease in accounts receivable 73 223
Increase in merchandise inventories (143) (264)
Increase in supplies and prepaid
expenses (4) (15)
Increase in other assets not
separately identified (1) (21)
Increase in accounts payable and
accrued liabilities not separately
identified 49 27
Increase (decrease) in current
income taxes 21 (48)
Increase in deferred income taxes 6 6
Increase (decrease) in other liabilities
not separately identified (23) 5
----------- -----------
Net cash provided by
continuing operating
activities 204 169
----------- -----------
Cash flows from continuing investing activities:
Purchase of property and equipment (41) (81)
Capitalized software (13) (11)
Disposition of property and equipment 2 -
----------- -----------
Net cash used by continuing
investing activities (52) (92)
----------- -----------
Cash flows from continuing financing activities:
Debt issued - -
Financing costs - -
Debt repaid (7) (8)
Increase in outstanding checks 1 41
Acquisition of treasury stock (120) (1)
Issuance of common stock 2 15
----------- -----------
Net cash provided (used) by
continuing financing
activities (124) 47
----------- -----------
Net cash provided by continuing operations 28 124
Net cash provided by discontinued operations - 249
----------- -----------
Net increase in cash 28 373
Cash at beginning of period 716 636
----------- -----------
Cash at end of period $744 $1,009
=========== ===========
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